My father recalls walking into our local town, visiting four separate shops: the butcher, greengrocer, hardware and newsagent shops. Conversation naturally comes around to today's supermarkets and the effect Tesco, Waitrose and Sainsbury have had on the high street. I am in my early 30s, and can't remember life before the supermarket, but trends are like the fashion industry and it's happening all over again, only this time the high street is online.
In Steve Job's brilliant keynote for the iPod2 launch he revealed some really interesting stats. Jobs said that Apple now has over 200 million accounts across its three core online services: iTunes, iBooks and the App store. The stats are staggering, and while these numbers probably put Apple in the top spot for the number of credit card-connected online accounts, other giants such as Amazon and eBay can't be far behind.
These new gorillas of the online world are a real threat to the smaller online retailer. While the IMRG, reports online sales growing at a 21% year-on-year rate, the biggest areas of growth are with the top 10 online retailers. Are we on the verge of an online high street take-over?
Thankfully the answer is no, but with an ever increasing chance of running into one of the online giants, it is getting harder to compete.
Be nice and niche
The two pieces of advice I always give to online merchants are: never compete in a fight you'll lose and always provide a stunning service.
To illustrate this perfectly, we have a brilliant customer that has successfully managed to transition the family book shop from the high street to the online world. But on paper the odds were stacked against them, especially considering the rise of Amazon and eBooks. The answer for this store was to get niche, co-operate with Amazon and build a reputation for the best service in the industry.
Getting niche is a simple way of avoiding the giants - finding an area that is in a small market and very specialist. Competition kills margins so if there are going to be new entrants (and there are if you are in a good size market) you will find it hard to succeed without lots of hard work.
Providing a stunning service is often a deal maker for many people. I always remember the sites that have gone the extra mile for me and I tend to be very loyal, sometimes regardless of cost. Talk to your customers, understand their needs and look at ways to improve the experience. Customer service doesn't need to be costly.
There is also an interesting spirit of co-operation that just doesn't exist offline. The big boys realise they simply can't do it alone, in-fact in the case of eBay they don't do any of it! It's alright for merchants to trade in multiple places, but the one piece of advice I would give is to always direct customers back to the domain you own.
Ecommerce is now a mature marketplace and while it's easy to draw comparisons with the traditional high street the reality is very different. The economics of bricks versus clicks are poles apart and if you are ready for some inventive thinking and hard work there is no reason why you shouldn't prosper.
By Ben Dyer, Product Development Director, Sellerdeck. Originally published on BusinessZone.